Lukoil has finished an evaluation and independent audit of its oil and gas reserves, as they stand on December 31, 2013. The evaluation was performed in accordance with the U.S. Securities and Exchange Commission standards until the economic limit of commercial production is reached.
The audit results by Miller and Lents, a U.S. firm, suggest that Lukoil's proved hydrocarbon reserves, as of December 31, 2013, came to 17.4 billion boe, including 13.5 billion barrels of oil and 23.6 trillion cubic feet of gas. Replacement of production by proved reserves increment in 2013 exceeded 100%.
Proved reserves increased due to geological exploration, production drilling and acquisitions, and totaled 822 million boe. The exploration operations in the conventional regions of the company’s operations, accelerated commissioning of the fields discovered in 2013, and the acquisition of assets resulted in the proved reserves increment.
For the first time ever the estimated proved reserves per acquired assets (ZAO Samara-Nafta and the Imilorsko-Istochniy license area) totaled 178 million boe, unproved reserves and contingent resources reached 991 million boe. The company’s management expects a considerable increment in the proved reserves across the above assets, as progress is made developing the fields making up those assets.
The positive reinterpretation of the proved reserves in the amount of 116 million boe accounts for the improved development techniques of the operated fields, as well as the accounting of the tax privileges for the hard-to-recover and offshore reserves granted by the RF Government.
The company also completed an estimate of the contingent resources according to the PRMS classification. Category 3C contingent resources totaled 12.2 billion boe as of December 31, 2013. A 15.6% increment in the contingent resources as compared to 2012 is attributable to the new acquisitions of the company.
Lukoil's management expects the oil and gas volumes classified as contingent resources to be transferred to reserves as their commissioning date approaches, a program to enhance volumes of gas utilization is implemented, pilot operations are completed, and new highly efficient techniques are applied, allowing it to develop the hard-to-recover reserves in a cost-effective way.
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